The United States insisted Monday that Nicaragua destroy hundreds of Soviet-made surface-to-air missiles after President Daniel Ortega said the weapons were needed for the country's defense.

Ortega, a former revolutionary who returned to the presidency on Jan. 10, said Friday it would be "absurd" to destroy Nicaragua's SAM-7 missiles while neighboring Honduras is adding U.S. planes to its military fleet. Nicaragua has been in a dispute with Honduras since 1999 over its territory in the Caribbean Sea.

The U.S. Embassy said in a media statement released Monday that Honduras is buying eight small planes from the U.S. to be used in the fight against drug trafficking and not offensive military aircraft.

"The U.S. government expects that Nicaragua will continue its already established path of disarmament and destruction of all SAM-7 missiles," it said.

Nicaraguan officials have destroyed half of their initial stock of about 2,000 missiles and Ortega's predecessor offered to destroy 651 more.

The Soviet Union supplied the missiles at a time when Ortega's former leftist Sandinista government was an ally in Cold War-era struggles against the United States. The U.S. supported Contra rebels trying to overthrow the Sandinistas.

U.S. officials say they fear the weapons could fall into the hands of terrorists.

Ortega's Sandinista party insists that the United States compensate Nicaragua for the missile destruction.

Click here to go to FOXNews.com's Americas Center.